After last week’s respite, the rupee continued its downward march on weak equities amid sustained dollar demand from importers and some banks, setting the week lower by 19 paise at 49.15/16 against the Greenback.

Forex market was closed on Thursday, October 6, for observing “Dassera”. At the Interbank Foreign Exchange (Forex) market, the local currency commenced the week sharply weak at 49.45/46 a dollar from last weekend’s close of 48.96/97 and immediately touched a low of 49.57.

Dealers attributed steep fall in the rupee value to distinctly weak equities on fears of Greek default which took the euro to near eight months low against the dollar.

The rupee started to recover after mid-week on dollar selling by exporters on expectations of fall in dollar overseas after the European banks intended to pump more money for ailing economies, giving investors hope that risks of a crisis was waning.

The rupee later bounced back to a high of 48.90 before concluding the week at 49.15/16, revealing a fall of 0.39 per cent. Last week, it had risen by 47 paise or 0.95 per cent.

The Indian BSE benchmark Sensex, despite recovery on the last day, ended the week down by 221.22 points or 1.34 per cent.

Mr Pramit Brahmbhatt, CEO, Alpari Financial Service (India) Pvt. Ltd. said, “This week rupee ended down, taking cues from the weak local equities. Euro held steady, pausing from gains made after the European Central Bank said it would provide liquidity to struggling euro zone banks with most investors hesitant to take big bets before US jobs data against the dollar.”

“Looking towards the global scenario we can expect dollar to trade strong against the rivals which will depreciate rupee above 50 level, which is the major resistance once breached, we could see the rupee touching its highest levels above 52 again,” he added.

Meanwhile, food inflation rose to 9.41 per cent for the week ended September 24, from 9.13 per cent in the previous week.

The Finance Minister Pranab Mukherjee expressed concern over high food inflation and said he has been in constant touch with the RBI on how to rein in the rate of price rise.

The Reserve Bank of India (RBI) fixed the reference rate for US dollar and Euro at Rs 49.1355 and Rs 65.9981 from Rs 48.9253 and Rs 66.6458 last weekend, respectively.

The rupee premium for the forward dollar remained weak on sustained receiving by exporters. The benchmark six—month forward dollar payable in March closed lower at 77—79—1/2 paise from 87—90 paise and far—forward contracts maturing in September also finished down at 108—110—1/2 paise, against 124—127 paise previously.

The rupee recovered against the Pound Sterling to end the week at Rs 76.37/39 from last weekend’s level of Rs 76.57/59 and also rose to Rs 66.06/08 per euro from Rs 66.63/65 last weekend. It, however, reacted downwards against the Japanese yen to Rs 64.36/38 per 100 yen from last weekend’s level of Rs 63.87/89.

Related Topics
comment COMMENT NOW